In a significant escalation of tensions in the global semiconductor industry, South Korean prosecutors have indicted 10 individuals, including former executives from Samsung Electronics, for allegedly leaking proprietary 10-nanometer (nm) DRAM technology to Chinese chipmaker ChangXin Memory Technologies (CXMT).
The case, announced in late December 2025, highlights ongoing concerns over industrial espionage amid fierce competition in memory chip production. Prosecutors estimate that the breach caused Samsung losses of approximately 5 trillion Korean won (about $3.57 billion USD), underscoring the high stakes involved in safeguarding advanced semiconductor intellectual property.
Details of the Allegations
According to the Seoul Central District Prosecutors' Office, the accused group systematically transferred sensitive manufacturing secrets related to Samsung's 10nm DRAM processes.
This technology, which Samsung reportedly invested 1.6 trillion won (around $1.14 billion USD) to develop, involves intricate production methods critical for creating high-density, energy-efficient memory chips. DRAM, or Dynamic Random-Access Memory, is a type of semiconductor memory essential for devices like smartphones, computers, and servers.
The "10nm" designation refers to the process node, where smaller transistor sizes allow for greater memory capacity and improved performance on a single chip.
The investigation revealed that one former Samsung engineer bypassed digital security measures by manually transcribing over 600 detailed process steps, including gas flow ratios, temperatures, and equipment settings.
These handwritten notes were then allegedly used to replicate and adapt the technology for CXMT's equipment, enabling the Chinese firm to accelerate its own DRAM production.
Prosecutors claim this leak directly contributed to CXMT's ability to manufacture China's first 10nm-class DRAM chips as early as 2023.
The case also extends to attempts to steal technology from SK Hynix, South Korea's second-largest memory chipmaker, through a subcontractor. Of the 10 indicted, five have been arrested, while the remaining five face charges without detention. All are accused under South Korea's Industrial Technology Protection Act, which aims to prevent the outflow of core national technologies. Violations of this law can result in severe penalties, including lengthy prison sentences and substantial fines.
Background on DRAM and Its Strategic Importance
DRAM production is a highly complex process involving hundreds of precisely orchestrated steps, from wafer preparation and photolithography to etching and testing. Even minor deviations—such as slight variations in temperature or chemical composition—can render an entire silicon wafer defective, leading to significant yield losses. Developing a viable 10nm process typically requires years of research, billions in investment, and numerous trial-and-error iterations.
South Korea dominates the global DRAM market, with Samsung and SK Hynix controlling over 70% of worldwide supply. This dominance has made the country a prime target for technology theft, especially as nations like China seek to reduce reliance on foreign imports amid U.S.-China trade tensions. The leaked 10nm technology represents a generational leap, enabling denser memory modules that are crucial for emerging applications like AI, data centers, and high-performance computing.
The Role of CXMT in China's Semiconductor Ambitions
ChangXin Memory Technologies, founded in 2016 and headquartered in Hefei, Anhui province, is China's leading DRAM producer and a key player in Beijing's push for semiconductor self-sufficiency.
Backed by state investments, CXMT specializes in manufacturing DRAM chips for consumer electronics, including mobile phones, PCs, tablets, and servers. The company has ambitious goals, aiming to capture a significant share of the global market - potentially up to half of worldwide DRAM demand in the long term.
In recent years, CXMT has made rapid strides, including the mass production of advanced LPDDR5X memory chips in October 2025, narrowing the technological gap with international leaders.
It is also developing High Bandwidth Memory (HBM) for AI applications, a critical area where China seeks independence from suppliers like Samsung and Micron.
Critics argue that such progress has been accelerated by alleged technology transfers, placing CXMT at the center of international scrutiny.
A Pattern of Semiconductor Espionage
This indictment is not an isolated incident but part of a broader pattern of alleged technology theft from South Korean firms to China. In September 2024, two former Samsung executives were charged with stealing DRAM technology worth 4 trillion won to benefit a Chinese firm, Chengdu Gaozhen. Earlier, in June 2023, a ex-Samsung executive was accused of establishing a copycat chip factory in China using stolen secrets. Similarly, in November 2024, a former SK Hynix engineer was sentenced to 18 months in prison for IP theft.
These cases reflect growing concerns over industrial espionage, with South Korea's government noting a shift in theft targets from traditional sectors like shipbuilding to high-tech areas like semiconductors. Analysts warn that soft penalties in the past have failed to deter spies, prompting calls for stricter enforcement.
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Implications for the Industry and Geopolitics
The fallout from this leak could reshape the semiconductor landscape. For Samsung, the estimated $3.57 billion in damages represents not just financial loss but a potential erosion of its competitive edge. If CXMT leverages the technology effectively, it could accelerate China's market share growth, challenging the duopoly held by Samsung and SK Hynix.
Geopolitically, the case amplifies U.S.-led efforts to restrict technology flows to China, including export controls on advanced chips. South Korea, caught between its economic ties to China and alliances with the West, may tighten its own safeguards, potentially leading to more arrests and international collaborations against IP theft.
As the trial unfolds, this scandal serves as a stark reminder of the vulnerabilities in global supply chains and the relentless pursuit of technological supremacy in the AI era.
